Can you be compliant and competitive?

Competition for financial services is as fierce as ever. At the same time increasing regulation is raising the stakes as well as creating opportunities for those who
can take them. Most organisations are putting greater resources into developing compliant procedures and systems as well as training staff.

But, regulations intended to make choices and prices transparent for customers may confuse and make already-complicated processes more daunting. The fact that customers will probably experience the same thing in all institutions is hardly a defence for disjointed customer service.

So how can you be competitive and compliant?

What's actually happening for customers?

None of the independent surveys of customer satisfaction in financial services has shown a significant improvement for many years. Finalta's report is the latest to confirm this (See The Case for Branch Service Improvement, August 2004).

This is despite many attempts to improve the experience that customers receive in the
branch. Now things could actually get worse. Most organisations' responses to regulation focus on efficient error- and riskfree interaction, with much less regard for customers and their needs. At the same time regulation can make common customer questions, such as "How much can I borrow?" Can I see an adviser? much more difficult.

In this environment, even skilled staff can become uncertain about what to say and how to talk to customers naturally.

The role of local staff in creating success

The branch will remain a significant delivery channel for at least another generation of investment. Many customers still prefer to complete complex financial transactions face to face. So the branch should provide a base for showcasing the values of the brand, building customer loyalty and driving sales. In reality, the opposite is often the case.

Delivering a rich customer experience is thus as important as ever. The opportunity to significantly improve service and sales results will always lie mainly with branch teams. But regulation-oriented processes increasingly impact staff behaviour, and risk having an adverse impact on their customers. Lost sales opportunities and increasingly frustrated customers can result.

New regulations are intended to provide benefits to customers via greater clarity and fairness. But these benefits will not occur naturally. Responsibility for helping customers to understand and make the most of the changes still depends on the actions of local staff and their managers. So, organisations have to work harder at designing compelling conversations that staff can apply to common customer situations that used to be easy pre-regulation.

Getting the customer pathway right

The first stage in building a differentiated,compliant customer experience is to walk in the customers' shoes. Looking at everything from a customer's point of view challenges institutional thinking. Instead of starting from the compliance perspective and adjusting processes and procedures to fit that, organisations must consider the customer experience first and adjust it to ensure compliance.

For example, common customer questions such as How much can I borrow? can be the best starting point.

Firstly, the pathway is mapped by capturing the physical and virtual aspects of customers reality. This provides the common perspective from which to remove barriers and identify the practicalities that branch teams have to overcome.

The second step is to define and choreograph staff and management activity in order to bring the customer pathway to life. This means working out the detail of the conversations, movements and in-branch processes that affect the overall experience. This choreography will emphasise that every member of the team has both an individual and overall team role to play.

The third step to success is the development of 'model behaviours. They characterise what fully proficient members of staff and management need to do to implement the new choreography. These behavioural standards complement existing processes and procedures and help staff deliver the whole experience. They also provide a clear view of what good looks like and an objective framework within which to assess new and existing recruits.

There is no need for the analysis of customer pathways and the development of new behaviour models to be a protracted exercise. These disciplines are well understood and need only take a few weeks. Getting it right, however, significantly increases staff's ability to engage with customers, understand their needs and deliver the right product compliantly.

Efforts to improve service and sales effectiveness are always on the agenda. Regulation can derail the best organisations unless they apply greater efforts to supporting staff and management at the point of customer contact.

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